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Thursday, November 03, 2016

The Economy Isn't an Engineering Project

The following passage is from page 239 of my late colleague Jim Buchanan‘s 1985 article “Political Economy and Social Philosophy” as it is reprinted in Moral Science and Moral Order, Vol. 17 of The Collected Works of James M. Buchanan:

I list the engineering urge as one of three related strands of intellectual motivation that must be eliminated if political economy, and the work of its disciplinary practitioners, can assume an appropriate role in social philosophy…. [T]he engineers find their raison d’être in solving problems or, at one stage removed, in suggesting solutions to decision-makers faced with problems. It is in this sense that modern economists have sought pervasively to assume roles as putative problem solvers, as policy advocates, as advisers to governments, directly and indirectly.

The GDP machine isn’t a real machine. Its levers, pedals, knobs, and buttons are largely imaginary fancies of arrogant imaginations.

If and to the extent that – and for as long as – economists think of themselves as expert advisers to those who are in control of what are imagined to be the levers, pedals, knobs, and buttons of a machine called “the economy” – or of what Arnold Kling calls “the GDP factory” – they will regard those (today relatively few) economists of a free-market bent as hopelessly naive, unsophisticated, and worse than useless. Pointing out, as many market-oriented economists do, that the GDP machine isn’t a real machine, and that its levers, pedals, knobs, and buttons are largely imaginary fancies of arrogant imaginations, market-oriented economists invite the scorn of Engineering economists, the self-ordained doers of scientifically objective good who look upon straightforward explanations based upon supply-and-demand analysis and other basic economic concepts as simplistic efforts to obstruct the social-engineers’ quests to make earthly existence more heavenly.

Donald Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University, and a former FEE president.